Oil prices rose above $83 a barrel Tuesday in Asia as stronger manufacturing in the world’s two biggest economies - the U.S. and China - boosted optimism that demand for crude will improve.

Benchmark oil for December delivery was up 35 cents at $83.30 a barrel at late morning Bangkok time in electronic trading on the New York Mercantile Exchange. The contract jumped $1.52 to settle at $82.95 on Monday.

Oil traders were more optimistic after two U.S. reports showed improvement in the manufacturing sector and in construction spending. Both came shortly after China said its manufacturing activity had improved.

The Institute for Supply Management reported Monday that U.S. manufacturing activity expanded last month at the fastest pace since May. It credited an increase in new orders, particularly for autos and computers, as well as exports.

In addition, construction spending inched higher in September because of an increase in residential activity and government projects that helped offset weakness in commercial projects. Yet, it remained 34 percent below the 2006 peak when residential housing boomed.

China said its purchasing managers index rose in October, a sign that its economic recovery remains intact.

The reports were released ahead of two key developments that could affect oil markets - Tuesday’s midterm elections in the U.S. and Wednesday’s decision from the Federal Reserve on economic stimulus programs.

Many analysts and traders think Fed policymakers will announce a Treasury bond buying program to pump money into the economy. That could push down the dollar which, in turn, would help support oil prices.

Because oil and other commodities are priced in dollars, a weaker dollar means they become more attractive to buyers using foreign currencies.

In other energy trading on the Nymex, heating oil was up 1 cent at $2.28 a gallon, gasoline gained 3 cents to $2.09 a gallon and natural gas fell 2 cents to $3.81 per 1,000 cubic feet.

In London, Brent crude rose 31 cents to $84.93 a barrel on the ICE Futures exchange.

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